Institutional Investor Organizations Seek SEC Rulemaking on Fee Reporting by Private Funds

The Institutional Limited Partners Association ("ILPA") urged the SEC to require private fund advisers to report, on a quarterly basis, direct and indirect fees, carried interest, expenses and fee offsets.

ILPA recommended that the SEC adopt a principles-based rule, as opposed to a specific template for fee reporting. ILPA argued that "a principles-based rule provides sufficient flexibility to ensure the level of transparency can accommodate market changes in the types of fees and fee offsets charged by private fund advisers and their affiliates without the need for continual SEC rulemaking to update a form or template in coming years." ILPA stated that the SEC Division of Investment Management could issue guidance, and the Division of Examinations could issue risk alerts, to incentivize uniformity in disclosures.

The Council of Institutional Investors supported the ILPA request.